Chapter 7, Problem 7.31AE

Extension of E7-30A: Multiproduct firm (Learning Objective 4)

Curtis Walker admired his wife’s success at selling scarves at local craft shows (E7-30A), so he decided to make two types of plant stands to sell at the shows. Curtis makes twig stands out of downed wood from his backyard and the yards of his neighbors, so his variable cost is minimal (wood screws, glue, and so forth). However, Curtis has to purchase wood to make his oak plant stands. His unit prices and costs are as follows:

	Twig Stands	Oak Stands
Sales price	$14.00	$40.00
Variable cost	$ 2.00	$13.00

The twig stands are more popular, so Curtis sells four twig stands for every one oak stand. Mary charges her husband $350 to share her booth at the craft shows (after all, she has paid the entrance fees). How many of each plant stand does Curtis need to sell to break even? Will this affect the number of scarves Mary needs to sell to break even? Explain.